AXcess News: Fertilizer Makers Report Strong Growth
April 24 2008 - 5:10PM
Marketwired
CARSON CITY, NV , are seeing potential benefits from those
skyrocketing prices.
Potash Corp. of Saskatchewan Inc. first-quarter earnings nearly
tripled, though its stock fell more than 6% following the news.
The Canadian company posted net income of $566 million, or $1.74
a share, compared with $198 million, or 62 cents a share, a year
earlier. Potash had expected earnings of $1.30 to $1.60. Revenue
surged 64% to $1.89 billion.
Chemical & Mining Co. of Chile Inc. saw its shares drop 3.5%
Thursday as well. SQM, a maker of specialty fertilizers, reported
fourth-quarter earnings for 2007 of $44.6 million, compared to
$29.7 million in the year-ago period, a gain of 50.4%.
Itronics (OTCBB: ITRO) shares followed its peers Thursday,
dropping 13% after a 25% gain the prior day after the alternative
fertilizer maker announced a 22% gain in first-quarter sales.
While farmers look to find ways of cutting costs this year,
cutting back on fertilizer use seems to be happening and many have
bought early, even stockpiling fertilizer in the fourth-quarter as
global prices for fertilizer soar.
The latest report by the International Center for Soil Fertility
and Agricultural Development (IFDC) shows that world fertilizer
prices rose steadily from 2004 to 2006, but from 2007 forward,
prices have soared.
Dr. Balu Bumb, leader of the IFDC Policy, Trade and Markets
program, blamed rising prices on farmers in Countries that produce
most of the world's food, namely the United States. "Farmers in
industrialized countries are applying high levels of fertilizers to
maximize harvests of grain," said Dr. Bumb. "Those forces drive
prices higher."
While major fertilizer makers have raised prices substantially,
smaller alternative fertilizer makers like Itronics have not. Dr.
John Whitney, President of Itronics, said that prices for the
Company's environmentally friendly GOLD'n GRO fertilizer have gone
up 22 percent this year, while major bulk fertilizer makers, like
SQM, have increased prices more than 100%.
Whitney's company, which last year doubled the capacity of its
Reno plant, reported first-quarter sales of fertilizer of $446,000.
As a maker of alternative fertilizer, Itronics' prices seem like a
sale item at Wal-Mart in comparison to SQM and others. Based on
Itronics' plant expansion the company could potentially see
three-times the dollar volume sales over last year's $1.8 million
total before the plant expansion was in place. In a telephone
interview Thursday, Whitney declined to forecast sales but admitted
that plant expansion and growing demand would benefit the Company's
bottom line results.
Whitney noted that a new product was being launched this year.
GOLD'n Gro Guardian, a systemic deer repellent, is to be sold on
the East coast once registration is completed. Itronics looks to
begin marketing its deer repellent in late May or June.
Unlike other fertilizer makers, Itronics' raw product comes from
recycled photochemicals. While it may sound odd, photochemical
waste is considered an environmental hazardous waste and disposal
requires strict EPA adherence. Itronics operates the only plant in
the US approved by the EPA, making its GOLD'n GRO line of liquid
fertilizers unique. But Whitney says that besides those advantages
the cost of raw materials aren't being affected by rising prices as
is the case for SQM. Another bonus are the heavy metals removed in
the fertilizer manufacturing process which Itronics turns into
5-ounce pure silver bars of numismatic quality. Silver sales in the
first quarter were up 70%.
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